3942 Federal Register / Vol. 63, No. 17 /Tuesday, January 27, 1998 / Notices

4 15 U.S.C. 78q–1.

5 17 CFR 200.30–3(a)(12).

1 15 U.S.C. 78s(b)(1).

2 17 CFR 240.19b–4.

3Securities Exchange Act Rel. No. 39322 (Nov.

13, 1997), 62 FR 62391.

prevailing exchange rate. DTC will not

process corporate bearer bonds through

CCS unless the paying agent is able to

convert the funds to U.S. dollars.

Second, DTC will suppress for

corporate bearer coupons the automatic

payment function that it applies to

municipal bearer coupons. Under the

current operation of CCS, DTC credits

participants’ accounts on the payable

date of the municipal bearer coupons

regardless of whether it has received the

money. With corporate bearer bonds,

DTC will need to receive the interest

payment before paying the participant

in order to avoid having to adjust

participants’ accounts due to

fluctuations in exchange rates. DTC has

informed the Commission that due to

the additional processing and tracking

of corporate bearer coupon deposits, a

surcharge will be added in the future for

the handling of these deposits.

DTC will require that each shell

contain the following information on its

face:

1. CUSIP number;

2. description of issue including

purpose, series, date of issue, and

maturity date;

3. payable date;

4. quantity of coupons enclosed;

5. dollar value of individual coupons;

6. total shell value unless payable in

Canadian dollars;

7. participant number; and

8. contact number and telephone

number of the depositing participant.

The shells will need to be

accompanied by one completed deposit

ticket for up to twenty-five shells which

provides the following information:

1. participant number;

2. shell quantity;

3. total dollar value;

4. CUSIP number per shell;

5. coupon quantity per shell;

6. dollar value per shell unless

payable in Canadian dollars; and

7. whether the coupons are future-due

or past-due.

DTC will verify the number of shells

listed on the deposit ticket and give the

participant a time-stamped copy of the

ticket. If the number of shells listed on

the deposit ticket does not agree with

the physical number of shells, the entire

deposit will be rejected and sent back to

the participant.

DTC believes that the proposed rule

change is consistent with the

requirements of Section 17A of the Act4

and the rules and regulations

thereunder because it promotes

efficiencies in the clearance and

settlement of securities transactions.

(B) Self-Regulatory Organization’s

Statement on Burden on Competition

DTC does not believe that the

proposed rule change will impose any

burden on competition that is not

necessary or appropriate in furtherance

of the purposes of the Act, in the public

interest, and for the protection of

investors.

(C) Self-Regulatory Organization’s

Statement on Comments on the

Proposed Rule Change Received From

Members, Participants or Others

Written comments from DTC

participants and others have not been

solicited or received.

III. Date of Effectiveness of the

Proposed Rule Change and Timing for

Commission Action

Within thirty-five days of the date of

publication of this notice in the Federal

Register or within such longer period (i)

as the Commission may designate up to

ninety days of such date if it finds such

longer period to be appropriate and

publishes its reasons for so finding or

(ii) as to which DTC consents, the

Commission will:

(A) by order approve such proposed

rule change or

(B) institute proceedings to determine

whether the proposed rule change

should be disapproved.

IV. Solicitation of Comments

Interested persons are invited to

submit written data, views, and

arguments concerning the foregoing.

Persons making written submissions

should file six copies thereof with the

Secretary, Securities and Exchange

Commission, 450 Fifth Street, N.W.,

Washington, D.C. 20549. Copies of the

submission, all subsequent

amendments, all written statements

with respect to the proposed rule

change that are filed with the

Commission, and all written

communications relating to the

proposed rule change between the

Commission and any person, other than

those that may be withheld from the

public in accordance with the

provisions of 5 U.S.C. 552, will be

available for inspection and copying in

the Commission’s Public Reference

Section, 450 Fifth Street, N.W.,

Washington, D.C. 20549. Copies of such

filing also will be available for

inspection and copying at the principal

office of DTC. All submissions should

refer to File No. SR–DTC–97–17 and

should be submitted by February 17,

1998.

For the Commission by the Division of

Market Regulation, pursuant to delegated

authority.5

Margaret H. McFarland,

Deputy Secretary.

[FR Doc. 98–1857 Filed 1–26–98; 8:45 am]

BILLING CODE 8010–01–M

SECURITIES AND EXCHANGE

COMMISSION

[Release No. 34–39562; File No. SR–NASD–

97–78]

Self-Regulatory Organizations; Order

Approving a Proposed Rule Change by

National Association of Securities

Dealers, Inc. Relating to the Amended

Interpretation of IM–8310–2

Concerning the Release of Additional

Disciplinary Information

January 20, 1998.

I. Introduction

On October 17, 1997, the National

Association of Securities Dealers, Inc.

(‘‘NASD’’ or ‘‘Association’’) submitted

to the Securities and Exchange

Commission (‘‘SEC’’ or ‘‘Commission’’),

pursuant to Section 19(b)(1) of the

Securities Exchange Act of 1934

(‘‘Act’’),1 and Rule 19b–4 thereunder,2 a

proposed rule change which amended

the Interpretation on the Release of

Disciplinary Information, IM–8310–2 of

Rule 8310 of the Procedural Rules of the

NASD (‘‘Interpretation’’ or ‘‘IM–8310–

2’’). A notice of the proposed rule

change was published in the Federal

Register on November 21, 1997.3 The

Commission has received no comment

letters on the proposed rule change. For

the reasons discussed below, the

Commission is approving the proposed

rule change.

In its notice, filed on October 17,

1997, the NASD Regulation, Inc.

(‘‘NASDR’’) proposed to amend IM–

8310–2 to include the phrase

‘‘electronic inquiry’’ in the rule

language so that it could respond to

electronic inquiries, as well as written

or telephonic inquiries. In the notice,

the NASDR also proposed to amend the

rule language to include the additional

information required to be reported on

the amended Forms U–4, U–5, and BD.

In November 1997, the NASDR

requested that the Commission approve,

on an accelerated basis, that portion of

the amended rule language that would

allow it to respond to electronic
Federal Register / Vol. 63, No. 17 /Tuesday, January 27, 1998 / Notices 3943

4Telephone conversation with Alden S. Adkins,

General Counsel and Mary M. Dunbar, Assistant

General Counsel, NASDR, and Belinda Blaine,

Associate Director, Katherine A. England, Assistant

Director, and Mignon McLemore, Staff Attorney,

Division of Market Regulation, November 26, 1997.

5See Securities Exchange Act Rel. No. 39442

(December 11, 1997), 62 FR 66706 (December 19,

1997).

6See Securities Exchange Act Rel. No. 30629

(April 23, 1992), 57 FR 18535 (April 30, 1992); and

Securities Exchange Act Rel. No. 32568 (July 1,

1993), 58 FR 36723 (July 8, 1993).

7See supra note 5.

8The NASD proposal to release additional

disciplinary history of its members and associated

persons was initially filed with the Commission on

November 26, 1996. See Securities Exchange Act

Rel. No. 37994 (November 27, 1996), 61 FR 64549

(December 5, 1996) (SR–NASD–96–38).

9See Securities Exchange Act Rel. No. 37407

(July 5, 1996), 61 FR 36595 (July 11, 1996); and

Securities Exchange Act Rel. No. 37431 (July 12,

1996), 61 FR 37357 (July 18, 1996); See also

Securities Exchange Act Rel. No. 37632 (September

4, 1996), 61 FR 47412 (September 9, 1996).

10See supra note 3, at p. 62391. See also letter

from Joan Conley, Secretary, NASD to Katherine A.

England, Assistant Director, Division of Market

Regulation, SEC, dated November 13, 1997,

(correcting Amendment No. 2 to reflect this

effective date).

11Upon approval of the electronic inquiry portion

of its proposal, the NASD had planned to begin

responding to electronic inquiries for PDP

information, via the Internet, on or about January

1, 1998. See supra note 3 at p. 62391. However,

hardware problems and system capacity have

hampered implementation. Telephone conversation

between Alden S. Adkins, General Counsel,

NASDR. and Katherine A. England, Assistant

Director, Division of Market Regulation, SEC,

December 29, 1997.

12 In approving this rule, the Commission notes

that it has considered the proposed rule’s impact on

efficiency, competition, and capital formation. The

release of additional disciplinary history of the

NASD’s members and associated persons should

result in competition for brokerage business among

those broker-dealers with impeccable disciplinary

histories. Efficiency should improve in the

marketplace as members and their associated

persons become more conscious of compliance and

the potential ramifications of this increased

disclosure. 15 U.S.C. 78c(f).

inquiries.4 Hence, the Commission

partially approved, on an accelerated

basis, that portion of the NASDR’s

request which gives the NASD the

option of responding to the electronic

inquiries of persons or entities

requesting employment and disciplinary

history of its members and their

associated persons.5 This order

approves the amended rule language

that addresses the release of additional

disciplinary history required to be

disclosed pursuant to amended Forms

U–4, U–5, and BD.

II. Description of Proposal

Under the NASD’s Public Disclosure

Program (‘‘PDP’’),6 the NASD, in

response to a written inquiry, electronic

inquiry,7 or telephonic inquiry via a

toll-free telephone listing, releases

certain information contained in the

Central Registration Depository (‘‘CRD’’)

regarding the employment and

disciplinary history of its members and

their associated persons, including

information regarding past and present

employment history with Association

members; all final disciplinary actions

taken by federal, state, or foreign

securities agencies or self-regulatory

organizations that relate to securities or

commodities transactions; all pending

disciplinary actions that have been

taken by federal or state securities

agencies or self-regulatory organizations

that relate to securities and commodities

transactions and are required to be

reported on Form BD or Form U–4; all

foreign government or self-regulatory

organization disciplinary actions that

relate to securities or commodities

transactions and are required to be

reported on Form BD or Form U–4; and

all criminal indictments, informations

or convictions that are required to be

reported on Form BD or Form U–4. The

Association also releases information

concerning civil judgments and

arbitration decisions in securities and

commodities disputes involving public

customers.

On November 25, 1996, as part of its

PDP, the NASD filed a proposed rule

change, SR–NASD–96–38, designed to

permit the NASD to release additional

information regarding the disciplinary

history of its members and persons

associated with a member.8 In January

1997, NASDR’s senior management

determined that the CRD redesign

should be reassessed in light of

changing business needs and rapidly

advancing computer technology. After

negotiations and discussions among the

Commission, the NASD, and the North

American Securities Administrators

Association, Inc. (‘‘NASAA’’)

concerning CRD development and

implementation, SR–NASD–96–38 was

withdrawn and replaced by this filing,

SR–NASD–97–78.

This filing proposes the same

substantive disclosure as SR–NASD–96–

38. Specifically, the proposed rule

change allows the NASD to release all

information on any question on page 3

(Question 22) of the amended Form U–

4 and Question 11 of the amended Form

BD, as approved by the Commission in

July 1996.9 The additional information

that the NASD proposes to disclose

includes:

1. All pending arbitrations and civil

proceedings that relate to securities or

commodities transactions;

2. Pending written customer

complaints alleging sales practice

violations and compensatory damages of

$5,000 or more;

3. Settlement’s of $10,000 or more of

arbitrations, civil suits, and customer

complaints involving securities or

commodities transactions:

4. Current investigations involving

criminal or regulatory matters;

5. Terminations of employment after

allegations involving violation of

investment-related statutes or rules,

fraud, theft, or failure to supervise

investment-related activities;

6. Bankruptcies less than 10 years old

and outstanding liens or judgments;

7. Bonding company denials, pay

outs, or revocations; and

8. Any suspension or revocation to act

as an attorney, accountant, or federal

contractor.

To accomplish the release of this

additional information, however, the

NASD has reformatted the questions set

forth on page 3 of amended Form U–4;

questions 13 through 16 on amended

Form U–5; and the Disclosure Reporting

Pages (‘‘DRPs’’) for both forms in a

manner that is compatible with its

current CRD technology protocol. The

reformatted, interim forms and DRPs

contain no substantive changes to any of

the questions.

The NASD proposes to make the

interim forms and the disclosure of the

additional information set forth in this

rule filing effective on February 17,

1998.10 This effective date will permit

members and the NASD to complete

annual registration renewals and permit

the NASD to train members on the use

of the interim forms before they are

implemented. The information that

would be released from January 1 11 to

February 17, 1998, would include only

that information that currently is

required to be reported on the Forms U–

4 and U–5.

III. Discussion

The Commission finds that the

proposed rule change is consistent with

the requirements of the Act12 and the

rules and regulations promulgated

thereunder applicable to the NASD.

Specifically, the Commission believes

that approval of the proposed rule

change is consistent with Section

15A(b)(6) of the Act. Section 15A(b)(6)

provides in relevant part that the rules

of the Association be designed to foster

cooperation and coordination with

persons engaged in regulating and

processing information with respect to

securities and not to permit unfair

discrimination among customers,

issuers, brokers or dealers.

Pursuant to Section 15A(b)(6), the

proposed rule change benefits the

public because, by releasing this

additional disciplinary information, the
3944 Federal Register / Vol. 63, No. 17 /Tuesday, January 27, 1998 / Notices

13 15 U.S.C. 78s(b)(2).

14 17 CFR 200.30–3(a)(12).

1The trackage rights are limited to southbound

movements and are provided solely to facilitate

directional operations between Houston, TX, and

Placedo. In addition, the trackage rights will

continue only so long as SPT continues to operate

directionally between Houston and Placedo.

NASD is providing investors with a

resource to aid them in choosing a

broker-dealer for their investment

needs. Moreover, increasing disclosure

of members’ and their associated

persons’ relevant disciplinary history

could help investors determine whether

to conduct or continue to conduct

business with a particular broker-dealer

or associated person. The Commission

notes that disclosure of this additional

information may serve as a deterrent to

fraudulent activity as well.

According to the NASD, the Forms

U–4 and U–5 had to be redesigned to

facilitate compliance with this

disclosure requirement at this time.

Thus, the forms were redesigned to be

compatible with the current CRD

protocol (i.e., the answers on the interim

forms now match the location of

questions in the CRD system). Upon

completion of the CRD redesign, the

forms as originally designed will be

implemented. The Commission,

therefore, approves the use of these

interim forms, recognizing their

necessity in disseminating this

additional disciplinary history to the

public.

For the above reasons, the

Commission believes that the proposed

rule change is consistent with the

provisions of the Act, and in particular,

with Section 15A(b)(6).

It is therefore ordered, pursuant to

Section 19(b)(2) of the Act,13 that the

remaining portion of proposed rule

change, SR–NASD–97–78, concerning

the release of additional disciplinary

information be, and hereby is, approved.

For the Commission, by the Division of

Market Regulation, pursuant to delegated

authority.14

Margaret H. McFarland,

Deputy Secretary.

[FR Doc. 98–1853 Filed 1–26–98; 8:45 am]

BILLING CODE 8010–01–M

DEPARTMENT OF TRANSPORTATION

Federal Aviation Administration

RTCA Technical Management

Committee

Pursuant to section 10(a)(2) of the

Federal Advisory Committee Act Pub. L.

92–463, 5 U.S.C., Appendix 2), notice is

hereby given for the RTCA Technical

Management Committee meeting to be

held February 19, 1998, starting at 9:00

a.m. The meeting will be held at RTCA,

1140 Connecticut Avenue, NW., Suite

1020, Washington, DC 20036.

The agenda will include: (1)

Chairman’s Remarks; (2) Review and

Approval of Summary of the Previous

Meeting; (3) Consider and Approve: a.

Proposed Final Draft, Minimum

Aviation System Performance Standards

for Automatic Dependent Surveillance

Broadcast (ADS–B), RTCA Paper No.

007–98/TMC–308, Prepared by Special

Committee (SC)–186; b. Proposed Final

Draft, Guidance for Initial

Implementation of Cockpit Display of

Traffic Information, RTCA Paper No.

384–97/TMC–305, Prepared by SC–186;

c. Proposed Change 2 to DO–229,

Minimum Operational Performance

Standards for Global Positioning

System/Wide Area Augmentation

System Airborne Equipment, RTCA

Paper No. 381–97/SC159–773, Prepared

by SC–159; (4) Discuss/Take Position

on: a. Proposed Revision to the Terms

of Reference for SC–190, RTCA Paper

No. 279–97/SC190–021; b. Discussion

on the Work Plan for SC–191,

Collaborative Decisionmaking; c.

Committee Chairman’s Progress Report

for SC–182, Avionics Computer

Resource; d. Committee Milestones,

RTCA Paper No. 006–98/TMC–307; e.

Status of SC–169, Data Link; f. Proposal

for Terrain Data Base Special

Committee; g. Proposal for SC–181,

Navigation Standards, to Develop a

MOPS for Navigation Data Information

on a Moving Map; h. Proposed Revision

to the Terms of Reference for SC–147;

(5) Other Business; (6) Date and Place of

Next Meeting.

Attendance is open to the interested

public but limited to space availability.

With the approval of the chairman,

members of the public may present oral

statements at the meeting. Persons

wishing to present statements or obtain

information should contact the RTCA

Secretariat, 1140 Connecticut Avenue,

NW., Suite 1020, Washington, DC

20036; (202) 833–9339 (phone); (202)

833–9434 (fax); or http://www/rtca/org

(web site). Members of the public may

present a written statement to the

committee at any time.

Issued in Washington, DC, on January 16,

1998.

Janice L. Peters,

Designated Official.

[FR Doc. 98–1924 Filed 1–26–98; 8:45 am]

BILLING CODE 4910–13–M

DEPARTMENT OF TRANSPORTATION

Surface Transportation Board

[STB Finance Docket No. 33539]

The Burlington Northern and Santa Fe

Railway Company—Trackage Rights

Exemption—Southern Pacific

Transportation Company

Southern Pacific Transportation

Company (SPT) has agreed to grant

overhead trackage rights to The

Burlington Northern and Santa Fe

Railway Company (BNSF) over SPT’s

line between Caldwell, TX, in the

vicinity of SPT’s Ennis Subdivision

milepost 30.8, and Placedo, TX, in the

vicinity of SPT’s Victoria Subdivision

milepost 14.2, a distance of

approximately 152.7 miles.1

The transaction was scheduled to be

consummated on January 19, 1998. The

purpose of the trackage rights is

improve the operating efficiencies of

SPT and BNSF.

As a condition to this exemption, any

employees affected by the trackage

rights will be protected by the

conditions imposed in Norfolk and

Western Ry. Co.—Trackage Rights—BN,

354 I.C.C. 605 (1978), as modified in

Mendocino Coast Ry., Inc.—Lease and

Operate, 360 I.C.C. 653 (1980).

This notice is filed under 49 CFR

1180.2(d)(7). If it contains false or

misleading information, the exemption

is void ab initio. Petitions to revoke the

exemption under 49 U.S.C. 10502(d)

may be filed at any time. The filing of

a petition to revoke will not

automatically stay the transaction.

An original and 10 copies of all

pleadings, referring to STB Finance

Docket No. 33539, must be filed with

the Surface Transportation Board, Office

of the Secretary, Case Control Unit, 1925

K Street, N.W., Washington, DC 20423–

0001. In addition, a copy of each

pleading must be served on Michael E.

Roper, Esq., The Burlington Northern

and Santa Fe Railway Company, 3017

Lou Menk Drive, P.O. Box 961039, Fort

Worth, TX 76161–0039.

Decided: January 20, 1998.

By the Board, David M. Konschnik,

Director, Office of Proceedings.

Vernon A. Williams,

Secretary.

[FR Doc. 98–1910 Filed 1–26–98; 8:45 am]

BILLING CODE 4915–00–P